1. Which one of the following statements is true?
a. As time goes by calls increase in value.
b. The “stock repair strategy” involves selling stock and buying calls.
c. The price of an expensive option is less than its value.
d. The “collar or hedge wrap” involves buying in the money puts and selling in the money calls.
e. If assigned the seller of a put would be long stock.
2. Which one of the following statemts is false?
a. Options can expire worthless
b. If assigned the seller of a call would deliver stock.
c. Total dollars equal 1/100 times per share quoted price.
d. Selling contracts results in a cash inflow.
e. The Collar protects long stock while allowing for modest upside gain.